The Rise of Automatic Scooters in India

Snapshot: How and why this sudden boom in the sales of automatic scooters in India has turned the tables for many two-wheeler manufacturers?

Maximum part of India remembers Kinetic Honda very fondly. Majority remembers it because it was the first and only scooter in the 80s and 90s that had a self start and an automatic gearbox. Launched with the right approach, Kinetic Honda soon became very famous in the middle and upper-middle class households. It looked stylish, was hassle free and had no issues that people found with the scooters Bajaj had to offer. Being two-stroke, it was a league of its own in the years that followed 1984, the year it was launched in. It was also India's first introduction to Continuously Variable Transmission that provided a seamless power delivery.

The merger ended after 14 years in 1998 when Firodias bought Honda's stake and started working independently. This also marked the end of an era of Kinetic Honda range of scooters. Honda, just after a few weeks of the break-up, decided to make a reentry in the Indian market with its new range of scooters. Honda launched Activa, its most prized possession, in 2000 and from there Honda never looked back.

So what actually happened during 90s that made 'Hamara Bajaj' move to motorcycles shunning its scooter business? And what precisely happened 2000 onwards that made the automatic scooters come back with a bang roughly 20 years after it made its way in the Indian market?

Well, it all started with Honda's Activa which was a nimble, more fuel-efficient, four-stroke, technically more advanced and more powerful scooter than its Bajaj and LML rivals. We as Indians have always preferred cost effectiveness to be the most important factor while buying an automobile, and it was a scooter that everyone in the family could ride which made it to make its way in almost every Indian household. 90s were all about the image that was associated with motorcycles which is why every Indian wanted to be seen riding a motorcycle. The less ambitious ones who had a family to cater to had a Bajaj Chetak. Towards the end of the 90s, people were emerging out of the entire idea of 'stereotyping' and did not want a motorcycle to prove themselves in front of this world. The motorcycles gave better fuel-efficiency, but were not practical for a family. The design these scooters had were futuristic and broke the myth of automatic scooters being only for women or sissies. The urban population tired of ever increasing traffic situation welcomed these two-wheelers with open arms and soon Activa took the number one spot in terms of sales leaving behind the invincible Hero Splendor.

Soon Hero, TVS, Suzuki, Mahindra and Yamaha realised the potential of the scooters and they all started manufacturing this new toy of the urban youth. The last few years' figures of all these manufacturers confirm the fact that it was a smart move by all these giants. In fact these days, we have scooters that are targeting specific categories like sexes, age-groups, working professionals, students etc. etc. Such is the force of the trend that is catching up that in FY 2013-14, some of the two-wheeler manufacturers even witnessed 63% of growth in their annual scooter sales whereas the motorcycles grew by a mere 14%. Even an expensive brand like Vespa sold a staggering 32,000 units last financial year. Last year also witnessed scooters forming 25% of the total amount of two-wheelers sold in Indian market.

Scooters are the main reason why TVS was able to dethrone Bajaj from the number three spot as Bajaj does not deal in scooters anymore (don't ask me why). This trend has also made Vespa brave enough to think of launching their 8 lakh scooter - the Vespa 946 - in India sometime in the future which is not a bad move considering the change the two-wheeler industry is witnessing. The scooters are no longer considered a social taboo or a stigma especially the urban market which is now happy to spend on the pleasures of life than something outrightly performance oriented.